Clause 10 - Powers of governing bodies to form or
Education Bill
11:00 am
Mr Stephen Timms (Minister of State (School Standards), Department for Education and Skills; East Ham, Labour)
I reaffirm the commitment that I made to the Committee last week that we will set out the policy that underlies the proposed regulations before the Bill leaves the House.
Amendment No. 22 would remove part of the system that we want to put in place to protect school companies. Restricting ''prescribed description'' to mean in accordance with the company's memorandum of articles would remove the ability to prevent certain bodies from joining companies, which we want to retain. We want companies to operate with as much flexibility as possible, but we still want a basic framework of protection that will cover who can join companies. Membership of a company will be significant to its operation, so we want the power to protect companies, when necessary, from having certain bodies as members. The amendment would impede that.
Such protection would be necessary where there was a clear conflict of interest. A stationery company might want to join and so become the sole supplier of stationery to the school company, which would be likely to limit the freedom of the school company to select the best deal for its members. We want to exclude potential conflicts of interests, and the regulations would allow us to do that.
We also want to exclude unsuitable individuals, such as those who have been barred from teaching or those with certain criminal records. The amendment would prevent us from making such exclusions. I hope that the hon. Member for Eddisbury (Mr. O'Brien) will think that it is right that amendment No. 22 should not be accepted.
We also want to protect companies by prohibiting them from borrowing money without permission. The best protection from running up large debts would be to require permission to borrow from those in a position to make a decision and to give advice based on the company's financial health. The amendment to ''prescribed company'' would prevent the Secretary of State, or an LEA, from exercising that power. Before we finalise the regulations, we want to consult widely on where that power should rest. The best organisation is likely to be the LEA, which the amendment would exclude. On reflection, the Committee may want to ensure that that power remains. In the light of that explanation, I hope that the hon. Gentleman will decide not to press the amendment.